TCR_Public/961216.MBX




InterNet Bankruptcy Library - News for December 16, 1996






Bankruptcy News For December 16,
1996



  1. O'Sullivan Industries Estimates FY 1997 Second Quarter Net Income Up
    25%-35% From FY 1997 First Quarter Level Due To Strong Gross Margins

  2. Wherehouse Entertainment Reorganization Plan Approved; Company to Exit
    Bankruptcy Proceedings

  3. Cygne Designs, Inc. announces third quarter and nine months 1996 results

  4. Global Village Announces Comprehensive Restructuring

  5. Stratosphere does not make interest payment of first mortgage notes




O'Sullivan Industries Estimates FY 1997 Second Quarter Net Income Up 25%-35%
From FY 1997 First Quarter Level Due To Strong Gross Margins


LAMAR, Mo., Dec. 16, 1996 - O'Sullivan Industries Holdings, Inc. (NYSE: OSU), a
leading manufacturer of ready-to- assemble furniture, today announced that
stronger-than-anticipated gross margins should boost net income for the fiscal 1997
second quarter ended Dec. 31, 1996.


Net income for this year's second quarter is estimated to be 25 percent to 35 percent
higher than the FY 1997 first quarter on slightly less net sales. Net income for this
year's first quarter was $3.5 million, or $0.21 per share, on sales of $83.1 million. In
the second quarter of fiscal 1996, net income was $458,000, or $0.03 per share, on
net sales of $79.6 million.


"We are enjoying strong gross margins this quarter due to improved product mix from
innovative new products, such as the Cockpit(TM), that has increased average selling
prices," said Daniel F. O'Sullivan, chairman and chief executive officer. "We are
controlling our overhead and related expenses and are continuing to experience high
capacity utilization at all three plants.


"Although our sales for this quarter are less than we originally anticipated due to the
bankruptcy and current liquidation of [Best Products, Inc.,] a major customer,"
O'Sullivan added, "we partially offset the loss of these sales with orders from
existing customers, as well as new customers such as two major home improvement
retailers. In the comparable quarter of the prior year, the bankrupt customer
accounted for approximately $7.5 million in net sales.


"Normally, we would not take the extraordinary action to pre- release earnings as we
are doing today, but under current conditions, we believe the company's financial
results will be much stronger than we had originally anticipated. We are doing our
best to ensure fall disclosure to our stockholders and the investment community,"
O'Sullivan pointed out.


The forward looking statements in this release involve risks and uncertainties and are
dependent upon a number of factors such as sales levels, product mix, customer
acceptance of existing and new products, material cost increases, loss of significant
customers, and other factors, all of which are difficult to predict and most of which
are beyond the control of the company. Please review the company's 10-K and most
recent 10-Q reports filed with the Securities and Exchange Commission.


As a leading manufacturer of ready-to-assemble furniture, O'Sullivan's products are
sold primarily through office superstores, mass merchandisers, catalog showrooms,
department stores, home improvement centers and other retailers.


SOURCE O'Sullivan Industries Holdings, Inc. /CONTACT: Terry L. Crump, Vice
President and CFO, 417-682-8379 or Phillip J. Pacey, Treasurer, 417-632-8312,
both of O'Sullivan Industries Holdings, Inc./




Wherehouse Entertainment Reorganization Plan Approved; Company to Exit
Bankruptcy Proceedings


TORRANCE, Calif., Dec. 16, 1996 - Wherehouse Entertainment, Inc., operating as a
debtor in possession under Chapter 11 of the U. S. Bankruptcy Code since August
1995, announced today that at a Confirmation Hearing held on December 13, 1996
the Bankruptcy Court issued its Confirmation Order approving the plan of
reorganization proposed by the company. The effective date of the reorganization, set
by the company, is expected to be January 31, 1997.


Confirmation of the Plan will enable the company to emerge from the proceedings as
a much better capitalized and competitively viable enterprise, according to Bruce
Ogilvie, President and Chief Executive Officer of the debtor in possession. "We are
very appreciative of the strong show of support for the Plan expressed by our
lenders, trade creditors, store landlords and others who expressed continuing
confidence in Wherehouse and its future," added Ogilvie.


It has been previously disclosed that the new Board of Directors of the reorganized
company intends to enter into a Management Services Agreement with Alvarez and
Marsal, Inc., to provide certain management services, including the services of
Antonio C. Alvarez to serve as Chairman of the Board and Chief Executive Officer
of the reorganized company. Mr. Alvarez co-founded Alvarez and Marsal in 1983
and has extensive experience in providing consulting and management services to
retail chains and other business enterprises. Separately, Mr. Ogilvie has agreed to
serve on the Board of Directors of the reorganized company.


Wherehouse Entertainment, Inc., a large prerecorded home entertainment retailer,
operates 265 stores in Arizona, California, Colorado, Nevada, Oregon, Utah, and
Washington.


SOURCE Wherehouse Entertainment, Inc. /CONTACT: Bruce Ogilvie of
Wherehouse Entertainment, Inc., 310- 538-2314, ext. 1900/




Cygne Designs, Inc. announces third quarter and nine months 1996 results


NEW YORK, NY--December 16, 1996--Cygne Designs, Inc. (Nasdaq:CYDS) today
announced results of operations for the third quarter and nine months ended
November 2, 1996.


Net sales for the third quarter ended November 2, 1996 were $80.7 million, a
decrease of $79.4 million or 49.6% from the comparable prior period. Net sales for
the nine months ended November 2, 1996 were $240.4 million, a decrease of $180.2
million or 42.8% from the comparable prior period.


The decreases in net sales for the third quarter and nine months of $79.4 million and
$180.2 million, respectively, were primarily attributable to the sale of the Company's
GJM business in February 1996, which generated sales of $31.8 million and $67.8
million, respectively, in the comparable 1995 periods, discontinued customers and
product lines, which generated sales of $33.9 million and $100.4 million,
respectively, in the comparable 1995 periods and decreases in sales to Ann Taylor
of $19.4 million and $14.7 million, respectively, from the comparable 1995 periods
as a result of the transaction with Ann Taylor discussed below. These decreases
were partially offset by increases in sales to those divisions of The Limited, Inc. with
which the Company continues to do business of $5.2 million and $0.4 million,
respectively, and increases in sales to other customers.


During the third quarter and nine months ended November 2, 1996 the Company had
reorganization expense of approximately $4.8 million as a result of the downsizing of
the Company and the redeployment of assets necessary to meet changes in continuing
customer needs. During the third quarter and nine months ended October 28, 1995 the
Company wrote-off approximately $37.2 million of the goodwill incurred in
connection with the acquisition of Fenn, Wright and Manson in April 1994.


Net income for the third quarter of 1996 was $20.0 million, or $1.61 on a per share
basis, compared to a net loss of $43.3 million, or $3.48 on a per share basis, in the
comparable prior period. Net income for the nine months of 1996 was $19.9 million,
or $1.60 on a per share basis, compared to a net loss of $53.0 million, or $4.21 on a
per share basis, in the comparable prior period.


As previously announced, the Company completed on September 20, 1996 a
transaction with AnnTaylor Stores Corporation whereby it sold to Ann Taylor
Cygne's 60% interest in CAT, Cygne's former sourcing joint venture arrangement
with Ann Taylor, and the assets of Cygne's Ann Taylor Woven Division that were
used in sourcing merchandise for Ann Taylor. On the closing of the transaction,
Cygne received 2,348,145 shares of Ann Taylor common stock and approximately
$9.7 million in cash, subject to post-closing adjustments. Ann Taylor also assumed
certain liabilities of the acquired sourcing operations. The Company used
substantially all of the cash proceeds received on closing of the transaction to repay a
portion of its outstanding senior bank indebtedness. As a result of the transaction, the
Company realized a pre-tax gain of $29.6 million.


Between October 23 and December 13, 1996, the Company sold an aggregate of
1,988,000 shares of the Ann Taylor common stock received upon the closing of the
transaction at various prices resulting in aggregate gross proceeds of approximately
$38.3 million before brokerage commissions and transaction expenses. The Company
has used and intends to continue to use a substantial portion of such proceeds to pay
down its outstanding indebtedness, and expects to use the balance of such proceeds
for working capital purposes, including costs associated with the start-up of its
business to manufacture and distribute brand name apparel bearing the KENZO
JEANS and KENZO STUDIO labels. With respect to these stock sales, an aggregate
of 509,000 shares were sold during the third quarter.


Net sales to Ann Taylor for the third quarter and nine months of 1996 amounted to
65.0% and 70.5%, respectively, of the Company's net sales. For the third quarter and
nine months of 1996 CAT and the Company's Ann Taylor Woven Division had
combined net sales to Ann Taylor of $52.5 million and $169.6 million, respectively,
and combined net income of $2.3 million and $5.5 million, respectively. Since the
closing of the sale of the Company's Ann Taylor sourcing business, the Company has
not had, and does not anticipate that it will have, sales to Ann Taylor.


If the transaction with Ann Taylor had been consummated on February 4, 1996, and
after giving effect to the sale of the Company's GJM business, the Company would
have had pro forma net sales of $28.2 million and $70.8 million for the third quarter
and nine months of 1996, respectively. Pro forma gross profit for the third quarter
and nine months of 1996 would have been $2.7 million and $7.4 million,
respectively. Pro forma loss from operations for the third quarter and nine months of
1996 would have been $7.0 million and $10.8 million, respectively. Pro forma net
loss for the third quarter and nine months of 1996 would have been $7.2 million and
$10.9 million, respectively. The pro forma net loss per share for the third quarter and
nine months would have been $0.58 and $0.87, respectively.


Cygne Designs, Inc. is a private label designer, merchandiser and manufacturer of
woven and knit career and casual clothing for women.


                    CYGNE DESIGNS, INC. AND SUBSIDIARIES
             Condensed Consolidated Statements of Operations
             (Unaudited, in thousands, except per share data)

                              Three Months Ended     Nine
                              Months Ended Nov. 2,    Oct. 28,
                                 Nov. 2,  Oct. 28,
                                1996       1995        1996   
                                  1995  

        Net sales                $ 80,709  $160,080    
        $240,351  $420,514

        Cost of goods sold         72,013   149,146     
        211,269   385,776

        Gross profit                8,696    10,934      
        29,082    34,738

        Selling, general and
         administrative expenses    6,566    16,187      
         23,903    50,530

        Gain from sale of AnnTaylor
         Woven Division and CAT    29,588        --      
         29,588       --

        Gain from sale of                                     
                  

         subsidiary, net               --        --          
         --     4,742

        Reorganization expense      4,813        --       
        4,813        --

        Bad debt expense               --        --          
        --      1,030

        Amortization of intangibles    91       957          
        273     2,868

        Write-off of goodwill          --    37,206           
        --    37,206

        Income (loss) from
         operations                26,814   (43,416)       
         29,681  (52,154)

        Other income                  739        --         
        1,293       --

        Interest expense            1,045     1,984         
        2,975    6,574

        Income (loss) before
         provision for income taxes
         and minority interests   26,508    (45,400)       
         27,999  (58,728)

        Provision (benefit) for
         income taxes              6,307     (2,712)        
         7,124   (7,126)

        Income (loss) before
         minority interests       20,201    (42,688)       
         20,875  (51,602)

        Income attributable to
         minority interests          230        578           
         961    1,399

        Net income (loss)        $19,971  $ (43,266)      $
        19,914 $(53,001)

        Net income (loss)
          per share              $  1.61   $  (3.48)      $  
          1.60 $  (4.21)

        Weighted average number of
         common and common equivalent
         shares outstanding       12,442     12,438         
         12,439  12,587

CONTACT: CYGNE DESIGNS, INC.

Roy E. Green

Chief Financial Officer

212-354-6474

or

IR CONTACT:

David Walke, Howard Zar, Shannon Moody

Press: Stacy Berns, Michael McMullan

Morgen-Walke Associates

212-850-5600




Global Village Announces Comprehensive Restructuring


SUNNYVALE, Calif.--Dec. 16, 1996--Global Village Communication
(Nasdaq:GVIL) today announced a comprehensive restructuring plan to streamline its
operations, reduce its workforce and enable the company to return to profitability.
The company expects revenues for its fiscal third quarter will fall significantly
below expectations. Accordingly, the company will report an operating loss for the
quarter, including non-recurring charges resulting from the planned restructuring, of
approximately $25 million to $30 million.


"The goal of these changes is to return Global Village to profitability, while allowing
us to focus on our core business of making easy-to-use personal communications
products for both Macintosh and Windows users," said Neil Selvin, Global Village's
president and CEO. The restructuring will involve several steps designed to
streamline the company and position it for future profitability and growth.
Specifically, the company announced:


- A reduction of its workforce by approximately 20 percent to streamline various
departments and bring headcount and operating expenses in line with projected
revenue. The 42 employees affected by the layoff will receive severance packages
and outplacement services.


- A reduction in other operating expenses. Non-headcount related expenses will be
reduced -- specifically in administration, marketing and operations -- to reduce the
break-even point and align the operating expense model with expected revenues and
gross margins.


- A reserve against anticipated product returns from resellers and distributors. While
the quarter has not been completed, the company expects the sell-through of certain
products, both on the Macintosh and Windows platform, will not achieve the levels
originally anticipated.


- A write-down of inventory and other assets to better match the expected sales of
various products in future quarters, and to reflect a refocusing on core product lines.


"The actions we are taking today will position Global Village as a more streamlined
and focused company," said Selvin. "We will have a renewed emphasis on personal
communications products, designed to be easy-to-use and to appeal to home and
small-business professionals on all major personal computer platforms.


"During the last six months, Global Village has introduced and shipped several
unique products for Windows users, along with several new Macintosh-based
products," Selvin continued. "These products have won significant critical acclaim
and form the cornerstone of our focus on creating innovative products that deliver
unique value to the personal computer user. Global Village will continue to develop
and market products that support this tradition of combining innovative software and
reliable hardware to create a total solution for the user."


Global Village expects to announce its third fiscal quarter results on January 21,
1997.


About Global Village Communication


With nearly eight million customers, Global Village Communication (Nasdaq:GVIL)
is a leading supplier of integrated communication solutions for personal computer
users. The company sells its products directly and through leading VARs, retailers
and distributors worldwide. For more information about Global Village products,
please visit "The Village" web site at http://www.globalvillage.comPortions of  
this news release contain forward-looking statements. Investors are cautioned that all
forward-looking statements involve risks and uncertainties, including, without
limitation, announcements by the company's customers and competitors, product
returns, risks related to delays in product development and new product
introductions, rapidly changing technology, an intensely competitive market, market
acceptance of new products, foreign operations, and general economic conditions.
Each of these factors, and others, are discussed more fully in the company's last filed
Form 10-K, Form 10-Q and the company's other filings with the Securities and
Exchange Commission.


CONTACT: Demer IR Marianne Baldrica, 510/938-2678 (Investor)
baldrica@demer-ir.com OR Global Village Kevin Burr, 408/523-2260 (Media)
kevinburr@globalvillage.com




Stratosphere does not make interest payment of first mortgage notes


LAS VEGAS, NV--Dec. 16, 1996--Stratosphere Corp. (NASDAQ: TOWV) today
announced that the 30-day period in which the company had to make its Nov. 15,
1996 $14.5 million interest payment had expired and has become an "Event of
Default" as defined in the company's First Mortgage Note Indenture.


The company had previously announced that it was highly unlikely that it would make
this payment.


The company is continuing to seek additional financing and is discussing
restructuring of its existing First Mortgage Note indebtedness. The outcome of any
discussion in connection with restructuring the terms of its existing First Mortgage
Note indebtedness is uncertain. In addition, it is highly likely that negotiations with
its creditors, whether successful or not at arriving at a restructuring, will involve a
bankruptcy filing as a means of formalizing and approving either a consensual or
nonconsensual restructuring. The company does not believe that a bankruptcy filing
will, in the long term, adversely affect daily operations or guest services.


Stratosphere Corp. is a casino/hotel/entertainment complex located at the north end
of the Las Vegas Strip. The complex is centered around the Stratosphere Tower, the
tallest free-standing observation tower in the United States. -0-


The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for
forward-looking statements. Certain information included in this press release (as
well as information included in the oral statements or other written statements made
or to be made by the company) contains statements that are forward-looking, such as
statements relating to plan for future expansion and other business development
activities as well as other capital spending, financing sources and the effects of
regulation (including gaming and tax regulation) and competition. Such
forward-looking information involves important risks and uncertainties that could
significantly affect anticipated results in the future and, accordingly, such results may
differ from those expressed in any forward-looking statements made by or on behalf
of the company. These risks and uncertainties include, but are not limited to, those
relating to development and construction activities, dependence on existing
management, leverage and debt service (including sensitivity to fluctuations in the
interest rates), domestic or global economic conditions, activities of competitors and
the presence of new or additional competition, fluctuations and changes in customer
preferences and attitudes, changes in federal or state tax laws of the administration of
such laws and changes in gaming laws or regulations (including the legalization of
gaming in certain jurisdictions). For more information, review the company's filings
with the Securities and Exchange Commission, including the company's annual report
on Form 10-K and certain registration statements of the company.


CONTACT: Stratosphere Corp., Las Vegas Tom Lettero, 702/383-5207